Secured patent protection for BLU-5937 in all major pharmaceutical markets; patents were granted by the European Patent Office and the Japan Patent Office in 2018 in addition to patents granted in the United States and China in 2017, with claims covering the composition of matter of BLU-5937 until 2034;

Concluded the quarter with cash, cash equivalents and short-term investments totalling $20.2 million, which should be sufficient to finance the Company's operations for more than two years.

"We are proud of the significant progress we have made over the last year in the development of our lead drug candidate BLU-5937 for chronic cough, having reached a significant development milestone in July with the initiation of our first-in-human study", said Roberto Bellini, President and CEO of BELLUS Health. "We believe BLU-5937 has the characteristics to be a best in class P2X3 antagonist for chronic cough, and now look forward to the Phase 1 results, expected in the fourth quarter of 2018."

BLU-5937 for Chronic Cough

On July 9, 2018, the Company initiated a Phase 1 clinical study for BLU-5937 in healthy subjects. The main objectives of the Phase 1 clinical study are to assess the safety, tolerability (including taste perception) and pharmacokinetic profile of BLU-5937. This is a randomized, double-blind, placebo-controlled study of orally administered BLU-5937 in up to 90 healthy adult subjects.

The study is divided in two parts: a single-ascending dose ("SAD") study, which is being conducted in up to 60 healthy subjects, and a multiple-ascending dose ("MAD") study, which will be conducted in up to 30 healthy subjects.

Results of the Phase 1 clinical study are expected in the fourth quarter of 2018. These results will help define BLU-5937's expected product profile, including the safety, tolerability (including taste perception) and dosing regimen for the Phase 2 proof-of-concept study.

The Phase 2 proof-of-concept study is expected to be initiated in 2019 in chronic cough patients. This will be a dose escalation study to assess the safety, tolerability and efficacy of BLU-5937.

Preclinical studies demonstrated that BLU-5937 is a highly selective P2X3 antagonist exhibiting a potent anti-tussive effect without affecting taste perception and an excellent safety profile. In a guinea pig cough model, BLU-5937 showed comparable anti-tussive efficacy to the current leading P2X3 antagonist in development, Merck & Co's gefapixant (also named AF-219 or MK-7264). In a rat taste model, BLU-5937 was not associated with taste loss whereas, consistent with clinical trial data previously presented by Merck & Co, gefapixant led to significant taste loss.

On July 19, 2018, the Company announced that patent protection for BLU-5937 had been secured in all major pharmaceutical markets following the Japan Patent Office's issuance of a decision to grant a patent with claims covering the composition of matter of BLU-5937 and related imidazopyridine compounds, in addition to pharmaceutical compositions comprising BLU-5937 and uses thereof. Equivalent patents with similar broad claims were issued by the European Patent Office in April 2018 and by the U.S. Patent and Trademark Office and the Chinese Patent Office in 2017. The patents have an expiration date of 2034.

Other Development Programs

Information on the Company's other partnered development programs – KIACTA™ for sarcoidosis, AMO-01 for Phelan McDermid syndrome and ALZ-801 for APOE4 homozygous Alzheimer's disease – can be found on the Company's website at www.bellushealth.com.

Summary of Financial Results

Three months ended

June 30, 2018

Three months ended

June 30, 2017

(in thousands of dollars, except per share data)

Revenues

$

8

$

41

Research and development expenses, net

(881)

(1,084)

General and administrative expenses

(946)

(541)

Net finance income

84

3

Change in fair value of contingent consideration

receivable

171

—

Realized gain on sale of available-for-sale

investment in FB Health

—

1,909

Deferred tax expense

—

(61)

Net (loss) income for the period

(1,564)

267

Basic and diluted (loss) earnings per share

$

(0.01)

$

—

Research and development expenses, net of research tax credits, amounted to $881,000 for the three-month period ended June 30, 2018, compared to $1,084,000 for the corresponding period the previous year. The decrease is attributable to lower expenses incurred during the quarter in relation to the development of BLU-5937, during which the Company completed all necessary preclinical studies on BLU-5937 in preparation to the Phase 1 clinical study, which was initiated in July 2018.

General and administrative expenses amounted to $946,000 for the three-month period ended June 30, 2018, compared to $541,000 for the corresponding period the previous year. The increase is mainly due to higher stock-based compensation expense in relation to the Company's stock option plan and deferred share unit plans.

Net finance income amounted to $84,000 for the three-month period ended June 30, 2018, compared to $3,000 for the corresponding period the previous year. The increase is primarily attributable to higher interest income due to the Company's increased cash, cash equivalents and short-term investments position ("liquidity position") following the equity offering in December 2017.

Change in fair value of contingent consideration receivable amounted to $171,000 for the three-month period ended June 30, 2018, compared to nil for the corresponding period the previous year. The contingent consideration receivable is related to the sale of the Company's equity interest in FB Health S.p.A ("FB Health") in June 2017.

Realized gain on sale of available-for-sale investment in FB Health amounted to nil for the three-month period ended June 30, 2018, compared to $1,909,000 for the corresponding period the previous year, and is related to the sale of the equity interest in FB Health in 2017.

As at June 30, 2018, the Company had available cash, cash equivalents and short-term investments totalling $20,247,000, compared to $23,888,000 as at December 31, 2017. Based on management's estimate and current level of operations, the Company believes that the current liquidity position is sufficient to finance its operations for more than two years.

The Company's full unaudited condensed consolidated interim financial statements and accompanying management's discussion and analysis for the three and six-month periods ended June 30, 2018 will be available shortly on SEDAR at www.sedar.com and on the Company's website at www.bellushealth.com.

BELLUS Health is a clinical-stage biopharmaceutical company developing novel therapeutics for conditions with high unmet medical need. Its pipeline of projects includes the Company's lead drug candidate BLU-5937 for chronic cough and several other partnered clinical-stage drug development programs. BLU-5937, a highly selective P2X3 antagonist, has the potential to be a best-in-class therapeutic for chronic cough patients who do not respond to current therapies.

Chronic cough is a cough that lasts more than eight weeks and is associated with significant adverse social, psychosocial and physical effects on quality of life. A recent commercial assessment performed by Torreya Insights on behalf of the Company concluded that, in the United States alone, more than 26 million adults have chronic cough and more than 2.6 million of these patients suffer from refractory chronic cough lasting for more than a year.

Forward-Looking Statements

Certain statements contained in this news release, other than statements of fact that are independently verifiable at the date hereof, may constitute "forward-looking statements" within the meaning of Canadian securities legislation and regulations. Such statements, based as they are on the current expectations of management, inherently involve numerous important risks, uncertainties and assumptions, known and unknown, many of which are beyond BELLUS Health Inc.'s control. Such risks factors include but are not limited to: the ability to expand and develop its project pipeline, the ability to obtain financing, the impact of general economic conditions, general conditions in the pharmaceutical industry, changes in the regulatory environment in the jurisdictions in which BELLUS Health Inc. does business, stock market volatility, fluctuations in costs, changes to the competitive environment due to consolidation, achievement of forecasted burn rate, potential payments/outcomes in relation to indemnity agreements and contingent value rights, achievement of forecasted pre-clinical and clinical trial milestones and that actual results may vary once the final and quality-controlled verification of data and analyses has been completed. In addition, the length of BELLUS Health Inc.'s drug candidates' development process, their market size and commercial value, as well as the sharing of proceeds between BELLUS Health Inc. and its potential partners from potential future revenues, if any, are dependent upon a number of factors. Consequently, actual future results and events may differ materially from the anticipated results and events expressed in the forward-looking statements. BELLUS Health Inc. believes that expectations represented by forward-looking statements are reasonable, yet there can be no assurance that such expectations will prove to be correct. The reader should not place undue reliance, if any, on any forward-looking statements included in this news release. These forward-looking statements speak only as of the date made, and BELLUS Health Inc. is under no obligation and disavows any intention to update publicly or revise such statements as a result of any new information, future event, circumstances or otherwise, unless required by applicable legislation or regulation. Please see BELLUS Health Inc.'s public filings with the Canadian securities regulatory authorities, including the Annual Information Form, for further risk factors that might affect BELLUS Health Inc. and its business.